INDIANAPOLIS, Ind. (Feb. 27, 2017) – An Indiana bill that would reform the state’s asset forfeiture laws to prohibit the state from taking property without a criminal conviction and taking on federal forfeiture programs by banning prosecutors from circumventing state laws by passing cases off to the feds, passed an important Senate committee last week.

Sen. Phil Boots (R-Crawfordsville) introduced Senate Bill 8 (SB8) on Jan. 3. The legislation would reform Indiana law by requiring a criminal conviction before prosecutors could proceed with asset forfeiture. Under current law, the state can seize assets even if a person is never found guilty of a crime, or even arrested.

SB8 also closes a loophole that allows prosecutors to bypass more stringent state asset forfeiture laws by passing cases off to the federal government under its Equitable Sharing forfeiture program. The proposed law would repeal Section 9 IC34-24-1-9 permitting the state to turn over seized property to the federal government.

Barring state and local law enforcement agencies from passing off cases to the feds is particularly important. In several states with strict asset forfeiture laws, prosecutors have done just that. By placing the case under federal jurisdiction, law enforcement can bypass the need for a conviction under state law and collect up to 80 percent of the proceeds from forfeited assets via the federal Equitable Sharing Program.

For example, California previously had some of the strongest state-level restrictions on civil asset forfeiture in the country, but law enforcement would often bypass the state restrictions by partnering with a federal asset forfeiture program known as “equitable sharing.” Under these arrangements, state officials would simply hand over forfeiture prosecutions to the federal government and then receive up to 80 percent of the proceeds—even when state law banned or limited the practice. According to a report by the Institute for Justice, Policing for Profit, California ranked dead last of all states in the country between 2000 and 2013 as the worst offender. During the 2016 legislative session, the state closed the loophole.

As the Tenth Amendment Center previously reported the federal government inserted itself into the asset forfeiture debate in California. The feds clearly want the policy to continue.

Why?

We can only guess. But perhaps the feds recognize paying state and local police agencies directly in cash for handling their enforcement would reveal their weakness. After all, the federal government would find it nearly impossible to prosecute its unconstitutional “War on Drugs” without state and local assistance. Asset forfeiture “equitable sharing” provides a pipeline the feds use to incentivize state and local police to serve as de facto arms of the federal government by funneling billions of dollars into their budgets.

A second bill introduced in the Indiana Senate (SB26) would implement similar reforms to the state’s asset forfeiture laws, but would not close the federal loophole.